
A 2 



'>H'. 



SPEECH 






HON. JOHN B. ALLEY, 



OF MASSACHUSETTS, 



THE STATE OF THE UNION. 



DELIVERED IN THE HOUSE OF KEPRESENTATIVES, JANUARY 28, 1862. 



The House being in Committee of the Who e on the state of the Union, Mr. 
ALLi-Y addressed the Committee as follows : ,^ 

Mr. Chairman : Never was I more strongly impressed with the profound 
conviction that no questions were ever agitated in these halls of greater im- 
portance, in all their aspects and in all their consequences, than the financial 
measures which the necessities of th^ hour call upon us now to inaugurate. 

Here, in mid-winter, with a stagnant trade, and in all the industrial energies 
of a great people palsied by the nightmare that is upon us, we whom the |)eo- 
ple have sent here to provide ways and means of relief, have done nothing; 
and so far as our monetary affairs are concerned, if we except perhaps the Com- 
mittee of AVays and Means, are apparently as unmoved as though all was well. 
With our Treasury upon the eve of bankruptcy, and those who have be^n sup- 
plying the wants of the Government knocking at the doors of the Treasury 
for the payment of their honest dues, until hundreds are already ruined, and 
unless something is speedily done you may soon count them by thousands; yet, 
hour after hour, day after day, and week aUer week, we have done but little 
except waste our valuable time in continual talking about comparativelj^ unim- 
portant matters. Great schemes are to be devised, and measures enacted, upon 
■which our national destinies almost depend, which should engage the earnest 
thought and the active energies of every member of this House, to the exclusion 
of everything else, until the task is accomplished. • 

The first thing to be done is to raise the means to carry on the Government, 
by making available its credit in the best possible manner, at the smallest ex- 
pense possible, with the least detriment to the material interests of tlie wiiole 
people. lotorder to accomplish this object of raising money at the least possi- 
ble expense, you must make your securities good by adequate taxation. Tliis, 
happily, the House has shown '\X& disposition to do by the adoption of the joint 
resolution of the 15th instant by an overwhelming majority. It now only re- 
mains to adjust the details of a plan of taxation, and to determ^iue the best 
means of making available the credit of the Government, so as to secure as 
much relief as possible to the great industrial interests of the nation, and with 
the least disturbance practicable to the m jnetary systems of the country. All 
will admit that our first great duty is to provide for the wants of the Govern- 
ment at any cost and every hazard. Every individual and corporate interest 
must bow in patriotic submission to the necessities of the Government. I con- 
fess I approach the discussion of these questions of finance with great distrust 
of my ability to satisfy fully my own judgment of what is entirely best to be 






W«at. r:©s. HiBt- Bo<- 



hfz 



done, much less to enlighten others with regard to their duty ; but having been 
engaged from my early manhood in business operations and financial negotia- 
tions, more or less extended, my attention has naturally been drawn to the 
consideration of this intricate subject; and I should be recreant to my convic- 
tions of duty if I failed to give to my constituents the reasons for my vote. 

The currency question has employed the brain and enlisted the pen of the 
profound philosopher, as well as that of the greatest statesmen and most emi- 
nent writers of every age, in every country, for many centuries. A mixed sys- 
tem of currency and barter was first introdufted by William the Conqueror 
eight hundred years ago ; and from tliat day to this we have an authentic 
record of its history. The history of the currency question furnishes the evi- 
dence of the world's civilization and progress. It is recorded of William that : 

" Having obtained the nation by conquest, he regarded every man as his 
steward, liable to render an account to him of whatever he possessed. He 
caused an exact inventory to be taken of all their possessions; he exacted pay? 
ment of taxes in military service, in the products of the land, and goods and 
merchandise of every kind." 

His great sagacity soon perceived the power and convenience of money, and 
he introduced coining, and fixed the rate at which he would receive coin as a 
commutation for services or taxes. Thus a system of eurrency naturally grew 
up ; it being made at first optional with the people to pay in money or in kind. 
Through every successive reign, for several centuries, the monarch exercised 
exclusive jurisdiction over the currency and all the possessions of his subjects. 
Crude as were their ideas, and false as were their notions of political economy, 
yet the prosperity of their material interests then, as now, depended upon the 
same great laws of supply and demand, and was seriously affected by every 
alteration in the currency as they were by every change of dynasty. 

In the reigns of the Henrys and the Edwards the coinages were frequently 
altered to suit the exigencies and wants of the Crown. An improvident and 
reckless monarch was sure to produce a dearth of money, and a dearth of mo- 
ney was always followed by a dearth of food. In those days, as well as in our 
own, a scarcity of money produced great distress, and even famine, in the 
midst of plenty. When the monarch's improvidence and reckless expenditure 
produced its natural result, scarcity of money, and the distress became intoler- 
able, a resort to coin of inferior metal, and the reduction of the standard of 
value, was the general expedient ; which had the effect always of partial but 
temporary relief In the reigns of Edward I and Edward II, the price of nearly 
all articles was established by law ; and the effect was that provisions became 
exceedingly scarce, and famine and pestilence ensued to such a fearful extent 
that the people were diminished by starvation and disease, to a degree which 
it was frightful to contemplate. These attempts to regulate the price of provi- 
sions by law, and also to determine the money value of labor by legal enact- 
ments, .ind the constant practice of enhancing and depreciating the currency as 
the necessities or whims of the Crown might suggest, occasioned rebellion, 
which cost some kings their-crown and others their life. 

In England, during the reigns of the thirteenth century, m some decennial 
periods, the currency would be changed, enhanced, or depreciated, as the case 
might be, over twenty per cent. When the standard of legal value and coin- 
age was lowered, as it was done sometimes in periods of great distress, to the 
amount of more than twenty per cent, temporary relief was sure to follow, 
and an impetus always given to every branch of industrial interests ; for its ef- 
fect, of course, being to increase the amount of currency, and enable every one 
that owed to pay his debts more easily, while he who had obligations due from 
others to himself was compelled to receive practically a less amount than was 
agreed upon when the obligation was incurred. 

So, on the other hand, when the standard of value was increased, or enhanced 
— that is as against labor and commodities — those who were in possession of 
gold and silver realized enormous profits, as well as those who had obligations 
due to them. The experience of those periods shows that even with an exclu- 
sive metallic currency, you are scarcely less free from fluctuations and embar- 
raaameuts, without proper economy, than you are under a credit currency. 



Down to the reign of Henry VIII, the Parliament of Great Britain had but 
little power and influence as against the Crown ; from that time its influence 
and power contiYiued to increase up to the present moment. Therefore up to 
that time tlie currency may be said to have been regulated entirely by the 
monarch ; and while instability and fluctuations from one extreme point to 
another marked every reign, the coin was not debased to any such extent as 
afterwards. Prohibitory laws were passed to prevent the exportation of coin ; 
statutory enactments for the regulation of labor and provisions ; but it was all 
to no purpose, private interest^^hen as now, always proving too ingenious for 
the public laws. In tke reign of Henry VIII, the people were taxed so enor- 
mously that there was not gold and silver enough in the realm to represent the 
amount of taxation without a deterioration of the coinage; and during this 
reign the coinage of gold was reduced in standard one third, and that of silver 
was reduced more than three-fourths. The enormous expenditures of Heni*y 
drove him to the necessity of excessive taxation, and there was no way to ob- 
tain relief, without ruining the people, except by debasing the currency. In 
his son's reign, Edward VI, the currency was debased to such an extent that 
£20,000 of this base coinage of his father's reign was increased to £180,000 of 
new coinage. Other nations now characterized the English coinage as "infa- 
mous." 

I mention these things to show how intimately connected the system of cur- 
rency is with the prosperity of Government and the people in every age ; and 
it is only in the light of history and the experience of the past that we may 
learn wisdom to guide us in surmounting the difiiculties of the present and pro- 
viding for the wants of the future. During all this period when this currency 
was fluctuating, the rate of interest would flOctuate from ten to sixty per cent. 
With the reign of Elizabeth commenced a determination to improve the cur- 
rency. Stowe says : 

"In 15C3 London was visited with a threefold plague — pestilence, scarcity of 
money, and dearth of victuals. These calamities, which came upon the nation 
almost as soon as the new coinage was completed, were the natural conse- 
quences of that measure — namely, of improving the coinage. When money 
was made worth hoarding, and by restraints on profit, capital was driven from 
employment, famine and sickness were sux-e to follow." 

During the siicceeding reigns, although the Government and the people sus- 
tained serious embarrassments, and the fluctuations were frequent and disas- 
trous, the standard was not reduced again until the days of Charles II, when 
scarcity of money again became Intolerable, both to Charles and the great bulk 
of the people. The old expedient was resorted to, of diminishing the valuejof 
the currency ; and arbitrary and oppressive enactments were enforced to pre- 
vent the exportation of specie. While this state of things existed, although 
there was not currency enough to supply the necessary channels of trade and 
the legitimate wants of the people, the cofl"ers of the great capitalists were filled 
to repletion. 

But fluctuations and distress continued in a greater or less degree until the 
Prince of Orange ascended the throne of England. He found money exceed- 
ingly scarce, and various expedients were resorted to to sustain the Govern- 
ment in the prosecution of its continental wars. But during the reign of this 
monarch — among the very wisest and best of England's sovereigns — the Bank 
of England was established ; and Parliament, in 1695, passed an act to sus])end, 
for a time, the coinage of guineas, and the importation of guineas was entirely 

Erohibited. The adoption of these measures, with the establishment of the 
lank of England a short time previous, created a mixed currency of paper and 
silver coin, which was taken freely in exchange for merchandise, produce, and 
Government dues. 

In 1G98 bank notes were twenty per cent, lower than specie, but in a few 
months the}' could be exchanged for gold at two and a half per cent. Strange 
as it maj' appear to those who have not investigated the subject, it is no less 
true Ihat greater stability and less fluctuation occurred after the introduction 
of this mixed currency of coin and papeV than ever before under an extensive 
metallic currency. With the restoration of peace in 1763, the national debt 



4 

was found to be £133,000,000. But the system of finance which was adopted 
by the Government, in conjunction with the bank, placed the securities of both 
on a strong foundation. The Government being in a good condition financially, 
and the bank being strong, the cry was universal for an improvement in the 
standard and specific value of coin. A new and improved coinage was resolved 
upon by the Government. Any great improvement in the coinage necessarily 
caused great scarcity of coin, and while it filled the coffers of those who had 
obligations iue them, it ruined multitudes who had incurred liabilities they 
expected to pay in the old coin. Therefore wCi^perceive that increasing or de- / 
creasing the volume of the currency in all countries and every age produces the 
same effect. Its undue expansion stimulating unhealthy business — causing 
high prices, and apparent but deceptive prosperity; while, on the other hand, 
contraction, causing stagnation in trade, distress and ruin are sure to follow ia 
its wake. The great financial desideratum, therefore, is to prevent the one 
and avoid the other as much as possible. The history of the currency with 
other nations on the continent shows the same results to have followed the 
same course of action there. 

I have spoken chiefly of England because she has a more authentic record, 
and her experience has been upon a wider field, and a larger scale, than that of 
other nations ; but the same inexorable laws of trade apply equally alike to all. 
The stable condition of the currency and trade of England, which I have spoken 
of as existing at one period in the last century, was of but short duration. Her 
enormous debt, and the deranged finances of the country, forced Parliament to 
pass, in 1797, the restriction act, which compelled the Bank of England to sus- 
pend specie payments. For more than twenty-four yeai-s succeeding that 
event the circulating medium was almost entirely composed of paper currency. 
In view of the history of England during this eventful period, which carried 
her through vast continental wars as well as one with America, with her in- 
calculable expenditures and overwhelming indebtedness, and in the light of our 
own experience, I can see nothing to alarm in the suspension of specie pay- 
ments by ourselves, and nothing in the financial condition of our own Govern- 
ment to occasion despondency, if we will but exercise the authority and apply 
the remedy at our command. It has been the purpose of England, through 
the whole record of her history, to be governed in her financial policy by the 
exigencies of the hour and the necessities of the occasion. 

The Government of England assimilates more nearly to our own than any 
other as a Government of the people ; hence, in all her financial arrangements 
— during the present century, at least^ — her Government has wisely cooperated 
with, and been regardful of, the interests of those who conducted the financial 
and business interests of the people, always, however, being careful to keep 
the control of every interest within its own grasp. We are most emphatically 
a Government of the whole people. We must be equally careful, in our finan- 
cial arrangements, to consult, so far as the wants of the Government will per- 
mit, the interests of those who have chief control of the financial and business 
interests of the country; but we must never forget that the Government is su- 
preme, and that individual will and corporate interests must all be subordi- 
nated to the overshadowing necessities of the Government. The question is 
not with us now, what system of finance is best under other circumstances, but 
what is the best to be done in this crisis ; and in order to determine that ques- 
tion, we must be governed more or less by considerations connected with exist- 
ing systems. 

There are three great financial measures now before Congress, the adoption 
of which, coupled with a determination to reform expenditures, will, in my 
judgment, resuscitate the drooping interests of trade, improve the credit cur- 
rency of the country, establish confidence, and place the public credit upon 
as firm a foundation as that of any Government on earth. First, authorizing 
the issue of §100,000,060 of Treasury demand notes of not less than ten dol- 
lars, to be made a legal tender, convertible at any time, in sums of not less than 
$100, into United States six per cent, bonds, payable in twenty years; or con- 
vertible into sterling bonds of not less than £500, interest payable in London. 
The second — simultaneous with this — the levying of a tax of $150,000,000. 
Thirdly, to provide a uniform currency, by adopting the recommendation in 



the able report of the Secretary of the Treasury, by causing all the bank circu- 
lation of the country to protect holders against loss by securing their redemp- 
tion by a pledge of United States stocks. I should not be in favor of either of 
these three measures standing alone; but in combination, each with the other, 
they will be found to confer the triple benefit of relief to our immediate necea- 
sities, establishing confidence on a firm foundation, and giving to the people a 
safe currency, which shall be uniform in every section of the country, and 
ample for all the requirements of trade. 

As to the first proposition, it furnishes a currency which supplies fully, with- 
out interest, the wants of the Government at a time when the Government is 
unable to meet its liabilities for any great length of time without making a 
forced loan. The adoption of this plan will save thousands from bankruptcy, 
and afford immediate relief to the creditors of the Government, and through 
them the entire community in every section of the country. It undoubtedly 
will increase the volume of the currency, and enhance prices — and this, in the 
minds of many, constitutes its greatest objection. To my view, however, it is, 
at the present juncture, a great merit. I have been all my lifetime an advocate 
of a restricted currency. I would always fetter paper issues with stringent pro- 
visions — never increasing them beyond the legitimate wants of a liealthful 
trade; but there are times in the histories of nations, as well as individuals, 
when contraction is detrimental to their interests, and expansion the salvation 
of all. Never shingle a leaky house in a storm ; if you do, the time which will 
elapse between taking oflf the old shingles and putting on the new would be 
sure to deluge you with a flood To undertake to collect $150,000,000 in a tax 
upon the people, with a contracted curreccy, would involve all in irretrievable 
ruin, except those, who are few in number, who owe nothing and have a great 
deal owing to them. I think the history of the currency question in otlier coun- 
tries — instances of which in England I have endeavored to give as fully as the 
brief time allotted to me in the discussion would permit — demonstrate most 
fully that it is unwise to invest in one kind of property, namely, specie, the pre- 
rogative of fixing the value of all other property. Said Lord Bacon, the wisest 
statesman, many think, that ever lived : 

" Above all things, good policy is to be used that the treasure and moneys in 
a State be not gathered into few hands, for otherwise a State may have a good 
stock and yet starve ; and money is like muck, no good unless it be spread." 

How often has it been witnessed in Great Britan, when there was a scarcity 
of money, that there was famine and distress in the midst of plenty ; and we 
have not been entirely free from such an anomalous state of things in our own 
country. 

But it is said by some that the issue of an irredeemable paper currency will 
destroy all values, and end in such depreciation as to make them as valueless 
as the French assignats or the Continental money of the American Revolution. 
How preposterous such an idea! The French assignats were only based upon 
one kind of property and receivable only for taxes, and the Continental money 
based upon nothing — no security at all. These issues will be based upon all the 

{)roperty of the country, and not only receivable for all public dues, but also 
or all private debts and obligations of every name and nature. They would be 
convertible into bonds bearing six per cent, interest, which bonds, of course, are 
sure to be paid as the sun is to shine. 

I do not think it would be well to have this a permanent measure. Govern- 
ment ought not in time of peace to issue anything in payment of its obligations 
but specie ; or at his time of need and war to issue any more paper promi- 
ses than is absolutely necessary to meet its pressing necessities. It siiould be 
its policy to fund them as fast as possible, and to that end I would furnish an 
additional inducement by making large sums convertible into sterling bonds, as 
that secures the payment in specie of both interest and principal. If this rule 
is adhered to, of confining the issues to the smallest amount possible, consistent 
with the wants of the Government, the circulation will not be increased be3'ond 
the requii-ements of a legitimate and wholesome trade. Too manj' forget " that 
money is merely the instrument by which the act is performed, and in which 
tibe account is kept, and the relative values calculated." If only specie was 



money, and that alone represents value, then, indeed, we should be able to do 
but little towards discharging the obligations which individuals as well as na- 
tions have itjcurred. The amount of specie in the country, available for purpo- 
ses of circulation, is ver}^ small in comparison with the necessity for its use if 
any considerable portion of the indebtedness would be liquidated by it. 

The whole amount of specie in the country is estimated at $300,000,000 • al- 
thougii at no period in the nution's history has the amount been so large as itia 
to-day. The individual indebtedness of the people of the United States, to say 
nothing of corporate. State, and national obligations, amounts to several thou- 
sand millions of dollars. In our own State of Massachusetts, where our currency 
is as sound, and our banking institutions as well managed as in any State of the 
Union, our floating indebtedness, consisting of obligations maturing and to be 
paid within an average of time of ninety days, exceeds, usually, I. calculate, 
$100,000,000 ; and yet our whole stock of specie seldom exceeds eight or nine 
millions. The immediate liabilities of the banks themselves are usually upwards 
of §50,000,000, The confidence felt in the ability of these debtors to meet their 
maturing obligations to such a vast amount, rests not upon the specie they have, 
but upon the j)roperty which they possess; and it matters not whether it be a 
piece of gold coinage, or a paper obligation, if it represents property of value, 
it is equally as good. So with these Government obligations. It may not have 
the specie, hut as long as it has the property which this obligation ie the repre- 
sentative of, it is quite as good. 

In this connection, if I had time, I would like to present to the House some 
statistics of the operations of the Bank of England during the suspension of 
specie paj-ments from 1*797 to 1821-22, to show the connection between its is- 
sues and the price of Government securities and all other stocks ; but I can only 
remark now, that in every instance whenever the circulating medium, or the 
issue of bank paper was increased. Government securities always rose in propor- 
tion to such increase. And whenever, on the contrary, the issues were con- 
tracted, Government securities, as well as all other kinds of property, fell just 
m the ratio of decrease of the currency. In two years previous to the suspen- 
sion of specie payments by the Bank of England, she reduced her circulation 
twenty-eight per cent. Her circulation being on the 1st of January, 1795, about 
£13,500,000 ; in January, 1797, a few weeks previous to the suspension, it was 
but little more than £9,500,000 ; and consols fell during this time thirty -five per 
cent. On the first of January, 1798, the bank circulation was a little over 
£11,000,000, and on the 1st of January, 1800, over £13,000,000. Consols rose du- 
ring those two years, from 49 to 62, over twenty-five per cent. Before the sus- 
pension, exchange on Hamburg was about 31^; after the suspension, it rose to 
38 ; but before 1800 it was reduced to 32, notwithstanding the continued sus- 
pension of specie payments, and the great increase of paper currency. From 
1813 to 1814, the public debt of Great Britain was increased about £7*8,000,000 
sterling, and the bank circulation was increased about twelve per cent., and 
consols rose from 58 to 66^ — and all this with an irredeemable paper currency, 
but founded upon an intelligent confidence in the power of the Government and 
the resources of the people'. 

All this but shows not only how important it is to avoid undue expansion, 
•which is sure to be followed by ruinous contraction, but also that confidence, 
credit, and value are not based exclusively upon specie, or a currency immedi- 
ately conveitible into that commodity, but are to be measured by the relative 
quantity of currency to the property it represents and the amount actually ne- 
cessary to the pftrfectly legitimate wants of trade, whether it be paper or gold. 

When we reflect that the Government has the power to compel the payment 
of taxes suflicient to liquidate all its obligations, and see a willingness to exer- 
cise that power to any necessary extent for that purpose, we cannot but have 
confidence. Supposing this war should continue, as the Secretary of the Treas- 
ury suggests it may, until July, 1863 — which, to my mind, is very improbable 
—according to his estimate, which I have no doubt is correct, we shall then 
owe $900,000,000. This looks like a large sum, but with our boundless re- 
Bourcesand matchless energies in the development of material interests we can 
pay the interest easily, and if need be a considerable portion of the principal 
annually. We can make, if we wish, our public lands, if managed properly, and 



disposed of judiciously, pay one-third of tins debt, if it be funded for twenty 
years, before it would become due, and then have enough left to pay two-tliirda 
of the balance in the succeeding twenty years. In fact, our public lauds, to- 
gether with the gold and silver obtained from the bowels of the earth, if re- 
served for that purpose, in all probability would liquidate the principal of this 
indebtedness in less than a third of a century. 

But in my judgment tliis contest will be closed before our indebtedness will 
exceed two-'tliirds that amount. At the same ratio of increase of wealth for 
the last few years ia the loyal States alone, it will not be much more than 
three and a half per cent, of the estimated value of vv'hat the wealth of those 
States will be when these bonds mature. Nine hundred millions of dollars is 
only about twice as much as the usual annual expenses of England in time of 
peace, and but little more than she has expended in a single year during several 
periods of her history. It is considerably less than one-fourth of her present 
indebtedness, with a population less ihan our own. The probable surplus earn- 
ings of the single State of New York might, if so disposed, wipe it all out iu 
ttn years. Can any man of reflection doubt, when he realizes these facts, that 
•we nave little cause to doubt the ability of this Government to maintain its 
credit unimpaired through any pecuniary trials it may be called upon ts^encoun- 
ter? If any are disposed to repine at present troubles, let them learn lessons 
of patience and wisdom from our fathers who have bequeathed to us tliis glo- 
rious inheritance; and may we not blush for shame when we reflect iipon their 
unexampled energies and our nerveless impotence? • 

I am in favor of issuing no notes of a less denomination than ten dollars, be- 
cause I am opposed to the Government competing in the circulation with the 
banks any more than is absolutely necessary to provide for its necessities; and 
if the small note circulation is left for the banks to supply to the local currency, 
predicated upon United States bonds, I think the interest of all will be pro- . 
moted ia the end, and simple justice onlj' done to those institutions. It has for 
a precedent the wise example of the Bank of England during the suspension of 
specie payments by that institution. It allowed the country banks to supply 
the local small note circulation, and thereby made the security stronger and 
confidence greater in the whole system. 

The measure of taxntion is so obviously wise and necessary, and the House 
has exhibited Such willingness to resort to it, that I will merely remark that 
that great statesman, William Pitt, always said " that nations, as well as indi- 
viduals, ought always, in contracting debts, to have some plan of redemption; 
without it, public confidence could not be retained." And Alexander Hamil- 
ton, among the ablest of statesmen and the greatest of financiers, said " that 
he wished to see it incorporated as a fundamental maxim in the system of pub- 
lic credit of the United States, that the creation of debt should always be ac- 
companied with the means of extinguishment." 

The other measure, of establishing a uniform national currency, substantially 

as recommended by our able Secretary of the Treasury, bj^ furnishing the banks 

with their circulating medium upon a pledge of United States stocks, is no new 

measure as the Secretary well observes. It has existed virtually in several of 

the States for many years. A similar measure was adopted in my own State 

ten years ago. As a member of the committee on banks and banking, in the 

Senate of Massachusetts, I had the honor to affix my signature to a very able 

report, recommending this measure, drawn up by my distinguished friend and 

, colleague, [Mr. Hooper,] then a member of that Legislature, now upon the 

I Committee of Ways and Means of this House. That proposition, upon mature 

I reflection, received then the approbation of my judgment, and the sanction of 

l tny vote ; and subsequent observation and experience have but confirmed and 

1 strengthened the convictions of that period. Never was so opportune a mo- 

\ ment as the present for carrying out this measure, which will furnish a currency 

\ to the whole country, uniform and sound. It will place the whole banking of 

'' the country upon a substantial, legitimate, and safe basis. 

Not the least among the many advantages of this system must be the great 
saving in exchange; in fact, annihilating the cost of exchange, or rather re- 
ducing it to a mere trifle. Thus will the great Northwest be relieved of a 
great burden, which has always, in periods of revulsion and scarcity of money, 



8 

oeen a terrible incubus upon the business interests of that section. Faculties 
for obtaining cheap exchange in new countries are almost impossible under any 
other system that I have ever heard suggested. This system, therefore, must 
commend itself most fully to their support. It will remedy, to a great extent, 
the evil, too prevalent in New England, of unsafe expansion of the circulation 
by our country banks, when tempted by large dividends and pressing custom- 
ers under an easy money market, which is always sure to be followed by dis- 
tressing contraction, leaving both banks and customers quite frequently in a 
crippled condition. It would compel these country banks, in order to make 
their capital remunerative, to rely more upon deposits aLd less upon circulation 
in the future. 

The effect of this will be to furnish an additional safeguard against overtrad- 
ing that cannot be otherwise than beneficial to the whole business community, 
no less' than to the banks themselves. It will also by its practical operation aid 
essentially in the resumption of specie payments at an early day after the set- 
tlement of our difficulties, by the prevention of undue expat sion. Basing our 
whole banking circulation upon the public stocks must create a demand and 
enhance the prices for them, making it for the salvation of all the moneyed in- 
terests of the country to preserve and maintain the credit of the national Gov- 
ernment. With the public credit preserved, it will be an easy matter for us to 
resume specie payments by selling our securities in the markets of Europe; for 
upon the return of peace they cannot fail to be a desirable investment, com- 
manding a large premium in the money markets of the world. This rebellion 
has taught us the necessity of strengthening by every means in our power the 
bonds of union between the several States ; and the Secretary upon that head 
well remarks: 

" A further and important advantage to the people may be reasonably ex- 
pected in the increased security of the Union, springing from the common inter- 
est in its preservation, created by the distribution of its stocks to associations 
throughout the country, as the basis of their circulation." 

Adopt these measures and diminish the burdens of the people by every pru- 
dent retrenchment and reform, by ferreting out and punishing severely the 
commission of all frauds, and then, if the policy of the Government in other re- 
spects shall be as vigorous and wise as its financial arrangements are politic and 
just, then, indeed, may we feel that if we have not " indemnity for the past," we 
shall at least have "security for the future." And I venture to predict a degree 
of pi'osperity for the American people, for the next ten years, unexampled in the 
annals of their history , then, also, shall we resume a place among the nations of 
the earth, commensurate with our vast empire, boundless resources, mighty in- 
terests, and high purposes. 



I. TOWERS 4 CO., printers. 



